legal corner Q&A

By Various Authors

Q. One of our longtime tenants recently got a new roommate. This tenant has parking in the building, but we have seen the roommate (who is not on the lease) parking there. We want to take the spot for our own car now but are worried that we could be subject to a decrease in rent because of the “reduction of service.” Will the tenant have a case if we can document that the subtenant is the one using the spot?

A. That fact that the tenant is allowing a roommate to use his parking space will most likely not help the landlord recover the parking space for several reasons. First, unless there is some very specific language in the lease restricting the use of the parking space to a specific individual, a tenant is entitled to allow a roommate to use his parking space. It is the same situation as if the tenant were given the right to use the back yard with the lease. In that situation, the tenant would be perfectly within his/her rights to share it with any roommates.

Second, even if having a roommate using the parking space somehow did constitute a breach of the lease, the landlord’s remedy would be to serve a three-day notice to perform covenant or quit, which, if uncured, would allow the landlord to terminate the entire tenancy and evict the tenant. While this would ultimately result in the parking space being vacated, it would come at the cost of evicting the tenant altogether. In other words, a breach by a tenant of a covenant in the rental agreement does not result in the tenant losing that particular housing service only, but rather results in the landlord’s right to declare a forfeiture of the entire tenancy.

A further complication in this situation is the amendment to the Rent Ordinance from a couple of years ago, pursuant to which a landlord who wishes to remove a “housing service” that is included in the tenancy, such as parking, must have “just cause” to terminate the housing service. Because the just causes available are those set up for evictions, unless it is tenant-fault-based just cause, such as nonpayment of rent, it is nearly impossible for a landlord to take away parking. The no-fault just causes available for evictions of tenants of a residential unit simply do not apply to the termination of the right to use a parking space. For example, an “owner move-in” eviction does not work as the owner does not intend to use the parking space as his “principal place of residency.”

If the landlord can figure out how to apply a just cause to remove the use of a parking space, the landlord must still give a corresponding rent reduction to account for the removal of the parking. Given the above restrictions, however, reducing the tenant’s rent is the least of a landlord’s problems in taking away a parking space assigned under a residential lease.

- Fredrik Emilson

Q. One of our tenants was keeping her storage items in the garage. DBI gave us a Notice of Violation and said that all storage must permanently be removed from this area. We told the tenant, and now she has hit us with a petition for a decrease in rent because of a decrease in housing services. Does she have a case, even though we removed the storage for health and safety reasons?

A. While the scenario posed by this question is very common, there is rarely a straightforward answer.

San Francisco Rent Ordinance Section 37.2 (r) states: “Garage facilities, parking facilities, driveways, storage spaces, laundry rooms, decks, patios, or gardens on the same lot, or kitchen facilities or lobbies in single-room occupancy (SRO) hotels, supplied in connection with the use or occupancy of a unit, may not be severed from the tenancy by the landlord without just cause as required by Section 37.9(a). Any severance, reduction or removal permitted under this Section 37.2(r) shall be offset by a corresponding reduction in rent. Either a landlord or a tenant may file a petition with the Rent Board to determine the amount of the rent reduction.”

The answer to the question largely depends on whether or not the storage in the garage was a housing service supplied with the use or occupancy of the unit. Such a housing service can be supplied either at the commencement of the tenancy or acquired during the tenancy through use. The best place to look to determine whether garage storage was a housing service supplied with the use or occupancy of the unit at the commencement of the tenancy is the lease agreement. Does the lease agreement contain any language that gives the tenant the right to store her belongings in the garage? If so, then garage storage would be considered a service supplied with the use or occupancy of the unit at the inception of the tenancy. In this case, the answer to the question is relatively simple. The tenant in this situation would more likely than not be successful in her decrease services petition, despite the fact that the storage was severed due to health and safety reasons.

Since the above-quoted section of the San Francisco Rent Ordinance requires that severance of storage space must be offset by a corresponding rent reduction and does not carve out any exceptions, such as health and safety reasons, where such severance would protect a landlord from a corresponding rent reduction, the landlord would not be successful in defending the petition based on his need to remove the items due to health and safety reasons.

If there is no language in the lease agreement that allows the tenant to store her belongings in the garage, absent some other form of evidence, storage of her belongings would not be considered a housing service supplied with the use or occupancy of the unit at the inception of the tenancy. Unfortunately, a tenant may acquire a housing service, such as storage, after the inception of the tenancy through use. This typically occurs when a tenant unilaterally begins to store her items in the garage and the landlord fails to notify the tenant that she is not allowed to store her items there. A landlord’s failure, over a period of time, to notify a tenant that such storage is prohibited may create a housing service despite the fact that the landlord never intended to make such storage part of the housing services supplied with the use or occupancy of the unit at the inception of the lease agreement or any time thereafter.

As part of the tenant’s decrease in services petition, the San Francisco Rent Board will seek to determine whether the tenant acquired this service through use and the landlord’s subsequent failure to notify the tenant that such storage was prohibited. In most cases, absent numerous letters telling the tenant that they must move their belongings, the Rent Board will find in favor of the tenant, and decide that the storage of her items in the garage is a “housing service.” As such, the Rent Board would more likely than not award a rent reduction to the tenant for this “decrease in services,” despite the fact that the landlord never intended this “service” to be supplied with the use or occupancy of the unit.

The lesson to be learned in this scenario is twofold. First, do not give a tenant the right to storage in the garage or anywhere else if you think you may be required to or desire to take that storage away sometime in the future, unless you are prepared to give the tenant a permanent rent reduction. Second, always notify a tenant to remove storage items if they are improperly or illegally storing items anywhere in the building, or be prepared to give a tenant a rent reduction when you do sever the “service.”

There may be a silver lining to the problem associated with acquiring a “service” through use and the landlord’s subsequent failure to notify. The 2008 version of the SFAA Lease Agreement now contains a covenant that allows the landlord to remove items stored by a tenant anywhere they are not allowed, such as common areas.

- Daniel R. Stern

Q. One of my tenants broke my no-pet policy. I served him a three-day notice, and he moved out at the end of the month he had paid for. Now he wants his security deposit back. Do I have to give it to him?

A. Your question fails to provide certain information necessary to answer it. First, for you to have properly given a three-day notice (it is assumed that it was a notice with the right to cure by getting rid of the pet), your no-pet policy would have to have been a part of the tenant’s rental agreement,
either explicitly or through house rules incorporated into it. If so, and the tenancy was properly terminated, the disposition of the security deposit must be made according to the requirements of California Civil Code Section 1950.5.

You have a right to withhold from the security deposit for the purposes of cleaning the apartment, making repairs for damages other than ordinary wear and tear, and to compensate you for any loss you suffered as a result of the tenant’s breach of the agreement, such as lost rent. If, for example, six months remained on a one-year lease, you would be entitled to retain that portion of the security deposit necessary to compensate you for any loss you suffer in rerenting the apartment, including less rent in hand over the balance of the original tenant’s term, after deducting costs of rerental, such as advertising, cleaning and painting
the unit, and broker’s commissions. Even with a month-to-month tenancy, having failed to receive 30 days prior notice of your tenant’s departure, you may still suffer a loss of rent.

However, you must keep in mind that the security deposit is not a “bonus” or “penalty” that the landlord gets to keep as a result of a tenant breach; rather, retention is limited to the prescribed reasons set forth in Section 1950.5. If, for example, the apartment were left in pristine condition and you immediately rerented it for a rent that would, over the balance of the vacated tenant’s remaining term, equal or exceed the rent that would have been collected, even after the costs of rerenting, you would be obligated to return the security deposit in full, even though the vacated tenant had breached his agreement.

But, contrary to the tenant’s wishes, he is not entitled to the return of the deposit simply because you required him to leave. The tenant did not vacate as an accommodation to you, but rather because he breached his rental agreement, and his right to some or all of the security deposit is also governed by the provisions of Section 1950.5, not by his desire to get it all back.

- Saul M. Ferster

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The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Fredrik Emilson is a principal with Cornerstone Law Group and can be reached at 415-357-2099. Daniel R. Stern is with Wasserman-Stern and can be reached at 415-567-9600. Saul M. Ferster can be reached at 415-863-2678. Copyright © 2008 by SF Apartment Magazine. All rights reserved.